Share Premium Account

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DEFINITION of 'Share Premium Account'

Usually found on the balance sheet, this is the account to which the amount of money paid (or promised to be paid) by a shareholder for a share is credited to, only if the shareholder paid more than the cost of the share.

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BREAKING DOWN 'Share Premium Account'

The share premium account may be used to issue bonus shares, write-off equity related expenses like underwriting costs, etc.

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RELATED FAQS
  1. What are the IRS regulations regarding a share premium account?

    A company's share premium account – also known as the capital surplus or additional paid-in capital – is more regulated by ... Read Full Answer >>
  2. How can an investor determine a company's annual return from looking at its financial ...

    The funds in a share premium account cannot be used for a company's general expenses. These funds are restricted in terms ... Read Full Answer >>
  3. What sectors are best for an investor seeking a high annual return?

    A company receives a share premium whenever it receives money in excess of the face value (par value) of its shares. Corporations ... Read Full Answer >>
  4. How does a share premium account appear on a balance sheet?

    A share premium account shows up in the shareholders’ equity portion of the balance sheet. The share premium account represents ... Read Full Answer >>
  5. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  6. What are some examples of general and administrative expenses?

    In accounting, general and administrative expenses represent the necessary costs to maintain a company's daily operations ... Read Full Answer >>

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